Here is a quote from Nobel Prize winning economist F.A. Hayek, reprinted from The University of Chicago Law Review, from the spring of 1949.
“Socialism has never and nowhere been at first a working-class movement. It is by no means an obvious remedy for the obvious evil which the interests of that class will necessarily demand. It is a construction of theorists, deriving from certain tendencies of abstract thought with which for a long time only the intellectuals were familiar; and it required long efforts by the intellectuals before the working classes could be persuaded to adopt it as their program.
In every country that has moved toward socialism, the phase of the development in which socialism becomes a determining influence on politics has been preceded for many years by a period during which socialist ideals governed the thinking of the more active intellectuals. In Germany this stage had been reached toward the end of the last century; in England and France, about the time of the first World War. To the casual observer it would seem as if the United States had reached this phase after World War II, and that the attraction of a planned and directed economic system is now as strong among the American intellectuals as it ever was among their German or English fellows. Experience suggests that, once this phase has been reached, it is merely a question of time until the views now held by the intellectuals become the governing force of politics.”
Sunday, November 30, 2008
Thursday, November 27, 2008
They're not “ideologues”?
Here economist Richard Ebeling explains the misconception that Barack Obama's economic appointees are “pro market.”
Wednesday, November 26, 2008
7.7 Trillion And Counting
Like kids in a candy store, our Federal Reserve has done everything it can to consume and steal its way through as much product as possible before heading home. They (Paulson & Bernanke) originally told congress that the total for the TARP bailout would be 700 billion dollars. They then turned toe and loaned out over 2 trillion dollars. Now they're pledging a sum total of over 7 trillion dollars, 24,000 dollars for every man, woman and child in the U.S., or roughly half of the GDP for 2007. In legal parlance, that's known as a “bait and switch,” something the government has passed laws against.
So now, in what appears as a soon-to-be-tragic abuse of power, we're getting to see first hand the truly fragile nature of our marketplace when it's up against such massive manipulations. Fear is creeping in faster than before, not just because of publicly perceived doom and gloom, but also because of the interventions themselves. So in their heavy-handed efforts to alleviate fear and create stability, they have succeeded in doing exactly the opposite. But ultimately that's just the status quo in intervention history. One would think that Ben Bernanke already understands this fact, since he's an economist and Depression Era historian. But apparently not.
These amounts are staggering. And so is Bernanke's attitude. In testimony on November 18th, he stated: “We take collateral; we haircut it; it is a short-term loan; it is very safe; we have never lost a penny in these various lending programs.” He's referring to lending out less money than the current market value of whatever collateral was accepted by The Fed. But so far, only they can say what that collateral is worth, since no one has been allowed to inspect their books. And I have a couple of nagging questions. Correct me if I'm wrong. These banks were over extended with bad assets in the first place. That's why they're in trouble. So what assets (collateral) are left? Their buildings? Their computers? Do those add up to several trillion dollars? Or are they offering as “collateral” the same SPV's that have wreaked so much havoc in the first place? What else do they have to offer? Their “good” loans? Which ones? How about their stocks? How much are they worth now? And when creditors collect, is it first-to-loan, first-to-get-paid-back? Essentially, the oldest loans come first. Right? So that leaves the American taxpayers last in line. If they've “never lost a penny” on these kinds of loans, which I doubt, then they had better be extraordinarily sure that the monies going out now will indeed be repaid. I know a poker face when I see one. And Bernanke seems far too dismissive about the size of these loans for my comfort. I feel like I'm watching a poker player with two pairs bluffing his way through to the end of the pot. Or maybe, to use another metaphor, like a policeman telling a crowd “don't worry; nothing to see here.”
Henry Paulson leaves me feeling the same way. In his testimony, he stated: “I think it would be extraordinarily unusual if the government did not get that money back and more.” Hey, Hank. Isn't this entire “credit crisis” an “extraordinarily unusual” situation? Isn't it, what most journalists, pundits and government watch dogs are calling “unprecedented”? That is, nearly by definition, extraordinarily unusual. His poker face isn't good either.
All of this adds up to a sum total of “what the bejabbers is going on?” We're shaking our heads at the size and scope of it. And we're shaking in our shoes over its implications.
We can't trust these guys anymore. They say one thing, and do something else. Then they change their minds, and tell us, in Paulson's own words, “you should thank me.” They've been binging on greenbacks, and it's time to cut them off. I would like to suggest a myopia intervention. You've had enough boys. Now back away from the printing press.
But I need to take a moment here, to digress, and smile smugly over what Congressman Scott Garrett (R) from New Jersey said recently regarding The Federal Reserve. He said:
“Whether it’s lending or spending, it’s tax dollars that are going out the window, and we end up holding collateral we don’t know anything about. The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”
This is, in my humble opinion, the very first rumbling of a call to nationalize The Federal Reserve, which is step two in my “Top 30 Watch List For Economic Armageddon.” It's another one of my “I told you so” moments. To my surprise, they've skipped a couple of steps. But I guess that shouldn't surprise me. It is government after all.
Remember, once they call for step one, “A State of Emergency,” our “crisis” will be seen as totally “out of control,” and the only remedy a bureaucrat understands is more control. That's the very definition of governance - to restrict, to control. And just one sidebar-style question: does this seem like a “representative” government to you?
My “Top 30 Watch List For Economic Armageddon”
U.S. Pledges Top 7.7 Trillion to Ease Frozen Credit
Another Day, Another $800B: 'Staggering Size of Bailout Necessary,' Economist Says
Bail-Outrage: Misuse of Funds, Lack of Transparency a National Disgrace
So now, in what appears as a soon-to-be-tragic abuse of power, we're getting to see first hand the truly fragile nature of our marketplace when it's up against such massive manipulations. Fear is creeping in faster than before, not just because of publicly perceived doom and gloom, but also because of the interventions themselves. So in their heavy-handed efforts to alleviate fear and create stability, they have succeeded in doing exactly the opposite. But ultimately that's just the status quo in intervention history. One would think that Ben Bernanke already understands this fact, since he's an economist and Depression Era historian. But apparently not.
These amounts are staggering. And so is Bernanke's attitude. In testimony on November 18th, he stated: “We take collateral; we haircut it; it is a short-term loan; it is very safe; we have never lost a penny in these various lending programs.” He's referring to lending out less money than the current market value of whatever collateral was accepted by The Fed. But so far, only they can say what that collateral is worth, since no one has been allowed to inspect their books. And I have a couple of nagging questions. Correct me if I'm wrong. These banks were over extended with bad assets in the first place. That's why they're in trouble. So what assets (collateral) are left? Their buildings? Their computers? Do those add up to several trillion dollars? Or are they offering as “collateral” the same SPV's that have wreaked so much havoc in the first place? What else do they have to offer? Their “good” loans? Which ones? How about their stocks? How much are they worth now? And when creditors collect, is it first-to-loan, first-to-get-paid-back? Essentially, the oldest loans come first. Right? So that leaves the American taxpayers last in line. If they've “never lost a penny” on these kinds of loans, which I doubt, then they had better be extraordinarily sure that the monies going out now will indeed be repaid. I know a poker face when I see one. And Bernanke seems far too dismissive about the size of these loans for my comfort. I feel like I'm watching a poker player with two pairs bluffing his way through to the end of the pot. Or maybe, to use another metaphor, like a policeman telling a crowd “don't worry; nothing to see here.”
Henry Paulson leaves me feeling the same way. In his testimony, he stated: “I think it would be extraordinarily unusual if the government did not get that money back and more.” Hey, Hank. Isn't this entire “credit crisis” an “extraordinarily unusual” situation? Isn't it, what most journalists, pundits and government watch dogs are calling “unprecedented”? That is, nearly by definition, extraordinarily unusual. His poker face isn't good either.
All of this adds up to a sum total of “what the bejabbers is going on?” We're shaking our heads at the size and scope of it. And we're shaking in our shoes over its implications.
We can't trust these guys anymore. They say one thing, and do something else. Then they change their minds, and tell us, in Paulson's own words, “you should thank me.” They've been binging on greenbacks, and it's time to cut them off. I would like to suggest a myopia intervention. You've had enough boys. Now back away from the printing press.
But I need to take a moment here, to digress, and smile smugly over what Congressman Scott Garrett (R) from New Jersey said recently regarding The Federal Reserve. He said:
“Whether it’s lending or spending, it’s tax dollars that are going out the window, and we end up holding collateral we don’t know anything about. The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”
This is, in my humble opinion, the very first rumbling of a call to nationalize The Federal Reserve, which is step two in my “Top 30 Watch List For Economic Armageddon.” It's another one of my “I told you so” moments. To my surprise, they've skipped a couple of steps. But I guess that shouldn't surprise me. It is government after all.
Remember, once they call for step one, “A State of Emergency,” our “crisis” will be seen as totally “out of control,” and the only remedy a bureaucrat understands is more control. That's the very definition of governance - to restrict, to control. And just one sidebar-style question: does this seem like a “representative” government to you?
My “Top 30 Watch List For Economic Armageddon”
U.S. Pledges Top 7.7 Trillion to Ease Frozen Credit
Another Day, Another $800B: 'Staggering Size of Bailout Necessary,' Economist Says
Bail-Outrage: Misuse of Funds, Lack of Transparency a National Disgrace
Tuesday, November 25, 2008
Who's Afraid of a Little Deflation?
This is a quote from JÖRG GUIDO HÜLSMANN, dated just last month, addressing the fears of deflation. It's from one of his essays you can get for free here.
There are also pages and pages of full length books on Austrian Economics, political economy, morality and especially our current financial mess, all of which can be downloaded free of charge.
"To raise these questions is to answer them. The crisis did not hit us despite the presence of our monetary and financial authorities. It hit us because of them.
Then there is the fear factor. If we follow a hands off policy, the majority of experts tell us, the banking industry, the financial markets, and much of the rest of the economy will be wiped out in a bottomless deflationary spiral.
The present essay argues that this is a half-truth. It is true that without further government intervention there would be a deflationary spiral. It is not true that this spiral would be bottomless and wipe out the economy. It would not be a mortal threat to the lives and the welfare of the general population. It destroys essentially those companies and industries that live a parasitic existence at the expense of the rest of the economy, and which owe their existence to our present fiat money system. Even in the short run, therefore, deflation reduces our real incomes only within rather narrow limits. And it will clear the ground for very substantial growth rates in the medium and long run.
We should not be afraid of deflation. We should love it as much as our liberties."
JÖRG GUIDO HÜLSMANN
Angers, France October 2008
In addition, if you're interested in the bailout and its ramifications, which are getting more ridiculous every day, you can check out their “Bailout Reader” blog. It has a huge pool of information about causes, effects, and best of all, what can be done to remedy our current financial situation.
There are also pages and pages of full length books on Austrian Economics, political economy, morality and especially our current financial mess, all of which can be downloaded free of charge.
"To raise these questions is to answer them. The crisis did not hit us despite the presence of our monetary and financial authorities. It hit us because of them.
Then there is the fear factor. If we follow a hands off policy, the majority of experts tell us, the banking industry, the financial markets, and much of the rest of the economy will be wiped out in a bottomless deflationary spiral.
The present essay argues that this is a half-truth. It is true that without further government intervention there would be a deflationary spiral. It is not true that this spiral would be bottomless and wipe out the economy. It would not be a mortal threat to the lives and the welfare of the general population. It destroys essentially those companies and industries that live a parasitic existence at the expense of the rest of the economy, and which owe their existence to our present fiat money system. Even in the short run, therefore, deflation reduces our real incomes only within rather narrow limits. And it will clear the ground for very substantial growth rates in the medium and long run.
We should not be afraid of deflation. We should love it as much as our liberties."
JÖRG GUIDO HÜLSMANN
Angers, France October 2008
In addition, if you're interested in the bailout and its ramifications, which are getting more ridiculous every day, you can check out their “Bailout Reader” blog. It has a huge pool of information about causes, effects, and best of all, what can be done to remedy our current financial situation.
Sunday, November 23, 2008
What Are They Thinking?
Ever wondered “What are they thinking?” when watching the news of our financial mess? In “Everything bad is good again,” writer Jacob Sullum puts some great illogical head scratchers into perspective. It's pretty funny.
Saturday, November 22, 2008
Out of Control (I Told You So pt. 2)
I've been reviewing some of the most recent information about the TARP program (Troubled Assets Relief Program). And I've dragged out of the online financial mire some interesting information that just isn't getting the attention it deserves. If you've been following the bailout news at all, you know that it's costing the American taxpayers about 700 billion dollars. And that more businesses, especially the automotive industry, are asking for a slice of the total, or even better, a bailout of their own. And lawmakers are seriously considering it. So not only is the program failing to bring about the stability that was promised. But it's also growing in amount, and branching out into other industries. These manuvres are in lock step with what I predicted in my other posts. But silly me, I gave the government, and their quasi-government “helpers” at The Federal Reserve, some credit (catch the pun?). I thought the massive amount they were confiscating publicly was all they would get.
Little did anyone know, they would get far more. But The Fed didn't make this massive addition public. What's most shocking, though, is that they're not accountable to anyone. So why just confiscate 700 billion, and be accountable for it, when you can confiscate over 2 trillion, and be accountable for less than half? Let's just go for broke. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aS1eWoJj0sKc
That's right. I said 2 trillion. Henry Paulson and the people at The Federal Reserve are now taking on the responsibility of doling out more than 2 trillion dollars. In an impressive and rapid response, Bloomberg News filed a freedom of information act request, demanding clarity in these massive transactions. It's important for taxpayers to know where their money is going. But the Federal Reserve refused. Bloomberg followed up by filing a lawsuit demanding disclosure. And still today the Fed is thumbing its nose.
The crux of this issue, though, isn't that they don't want to turn over their books for inspection. Any reasonable person can understand that what is essentially a client list is proprietary information. And the federal reserve isn't necessarily run by the government. So they don't have to turn over their books, unless they are accused of criminal activity. Which they're not. The real problem is that they have acquired another 1.3 trillion dollars in taxpayer monies without congressional approval.
This is no little booking error. It was a conscious decision – probably by a number of people working within The Fed. So it begs some serious questions. How did The Fed get it? Who within (or outside) The Fed authorized the use of these extra taxpayer funds? What authority do they have to do such a thing? What standards were used in making the decision to continue the program outside of congressional oversight? What standards will be used to decide who gets the additional money? Why, if the amount is so enormous, and the money not theirs, would they knowingly deny the rightful owners of the dollars access to their information? Was denial of this access predetermined? What was the original destination of the additional funds? Were they to be used in other programs that will now be underfunded?
To wit. What gives them the right? I smell a hideous abuse of power here. The last time I checked, it was criminal for private individuals to simply take taxpayer dollars. If they have confiscated the money, it could very well be a criminal act. If it's a loan they intend to pay back, the people deserve disclosure. But no charges have been filed – yet.
That much is shocking. But now is where the story gets funny, and borders on the ridiculous. When questioned about the extra money, Fed Chairman Ben Bernanke stated that he thinks disclosure would be “counterproductive.” His reason?
“There is a concern that if the name is put in the newspaper that such-and-such bank came to the Fed to borrow overnight for a perfectly good reason, that others might begin to worry 'is this bank credit worthy?' and that might create a stigma, a problem, and might cause banks to be unwilling to borrow, and that would be counterproductive.”
He's worried about their... reputations. So he's denying access to the information about what he's doing with huge amounts of taxpayer dollars, because he's worried about the banks getting a bad name. Isn't it a little late for that? He sought to alleviate concern over that issue by following up with statements like “We take collateral,” and the loans are “very safe.” So this begs another question. If you take collateral, and the loans are clearly safe, why not let everyone see your info? If what he said were actually true, it would be obvious to anyone with a little bit of interest. Reputations would remain in tact, and transparency would help to lessen any emerging Big Brother fears. (When was the last time you got a loan for a home, or even just a car, without telling every little financial detail to the people giving you the loan?) But all the while, Henry Paulson is testifying: “We need oversight. We need protection. We need transparency. I want it. We all want it.”
So this becomes strangely dysfunctional. What a pair, these two. Is this a conscious out-of-touch-with-each-other act? Is it unintentional? Or are they really on separate pages? Are they playing good cop/bad cop? Or are they the keystone cops? We might have to wait until charges are filed. Or at least until someone resigns.
Meanwhile, your dollars are getting sucked out of The Federal Reserve's doors as if there's a giant money vacuum outside. All of it essentially vaporising into no one knows where. I take that back. Only Henry Paulson and Ben Bernanke know where.
Here are some quick links giving just the numbers on how much the bailout is costing us, and who has received money so far.
http://www.breakthebailout.com/node/3
http://www.ritholtz.com/blog/2008/11/tracking-the-bailout/
Mises.org offers a lot of free books on line. One of them that's of particular interest right now is this book by Jorg Guido Hulsmann, explaining why deflation isn't what the politicos and the media make it out to be. It's only about 45 pages, and definitely worth the read.
Here is a website dedicated to following just the bailout.
Here is a Wall Street Journal discussion board video that takes about 4.5 minutes.
Here are some more links from mises.org, my favorite site, just in case you're starting to get a little skeptical about whether or not the bailout will actually work. Market corrections are good – not bad.
Consumers Don't Cause Recessions
Markets Need Time, Not More Poison
Financial Crisis and Recession
In Praise of Bankruptcy
Little did anyone know, they would get far more. But The Fed didn't make this massive addition public. What's most shocking, though, is that they're not accountable to anyone. So why just confiscate 700 billion, and be accountable for it, when you can confiscate over 2 trillion, and be accountable for less than half? Let's just go for broke. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aS1eWoJj0sKc
That's right. I said 2 trillion. Henry Paulson and the people at The Federal Reserve are now taking on the responsibility of doling out more than 2 trillion dollars. In an impressive and rapid response, Bloomberg News filed a freedom of information act request, demanding clarity in these massive transactions. It's important for taxpayers to know where their money is going. But the Federal Reserve refused. Bloomberg followed up by filing a lawsuit demanding disclosure. And still today the Fed is thumbing its nose.
The crux of this issue, though, isn't that they don't want to turn over their books for inspection. Any reasonable person can understand that what is essentially a client list is proprietary information. And the federal reserve isn't necessarily run by the government. So they don't have to turn over their books, unless they are accused of criminal activity. Which they're not. The real problem is that they have acquired another 1.3 trillion dollars in taxpayer monies without congressional approval.
This is no little booking error. It was a conscious decision – probably by a number of people working within The Fed. So it begs some serious questions. How did The Fed get it? Who within (or outside) The Fed authorized the use of these extra taxpayer funds? What authority do they have to do such a thing? What standards were used in making the decision to continue the program outside of congressional oversight? What standards will be used to decide who gets the additional money? Why, if the amount is so enormous, and the money not theirs, would they knowingly deny the rightful owners of the dollars access to their information? Was denial of this access predetermined? What was the original destination of the additional funds? Were they to be used in other programs that will now be underfunded?
To wit. What gives them the right? I smell a hideous abuse of power here. The last time I checked, it was criminal for private individuals to simply take taxpayer dollars. If they have confiscated the money, it could very well be a criminal act. If it's a loan they intend to pay back, the people deserve disclosure. But no charges have been filed – yet.
That much is shocking. But now is where the story gets funny, and borders on the ridiculous. When questioned about the extra money, Fed Chairman Ben Bernanke stated that he thinks disclosure would be “counterproductive.” His reason?
“There is a concern that if the name is put in the newspaper that such-and-such bank came to the Fed to borrow overnight for a perfectly good reason, that others might begin to worry 'is this bank credit worthy?' and that might create a stigma, a problem, and might cause banks to be unwilling to borrow, and that would be counterproductive.”
He's worried about their... reputations. So he's denying access to the information about what he's doing with huge amounts of taxpayer dollars, because he's worried about the banks getting a bad name. Isn't it a little late for that? He sought to alleviate concern over that issue by following up with statements like “We take collateral,” and the loans are “very safe.” So this begs another question. If you take collateral, and the loans are clearly safe, why not let everyone see your info? If what he said were actually true, it would be obvious to anyone with a little bit of interest. Reputations would remain in tact, and transparency would help to lessen any emerging Big Brother fears. (When was the last time you got a loan for a home, or even just a car, without telling every little financial detail to the people giving you the loan?) But all the while, Henry Paulson is testifying: “We need oversight. We need protection. We need transparency. I want it. We all want it.”
So this becomes strangely dysfunctional. What a pair, these two. Is this a conscious out-of-touch-with-each-other act? Is it unintentional? Or are they really on separate pages? Are they playing good cop/bad cop? Or are they the keystone cops? We might have to wait until charges are filed. Or at least until someone resigns.
Meanwhile, your dollars are getting sucked out of The Federal Reserve's doors as if there's a giant money vacuum outside. All of it essentially vaporising into no one knows where. I take that back. Only Henry Paulson and Ben Bernanke know where.
Here are some quick links giving just the numbers on how much the bailout is costing us, and who has received money so far.
http://www.breakthebailout.com/node/3
http://www.ritholtz.com/blog/2008/11/tracking-the-bailout/
Mises.org offers a lot of free books on line. One of them that's of particular interest right now is this book by Jorg Guido Hulsmann, explaining why deflation isn't what the politicos and the media make it out to be. It's only about 45 pages, and definitely worth the read.
Here is a website dedicated to following just the bailout.
Here is a Wall Street Journal discussion board video that takes about 4.5 minutes.
Here are some more links from mises.org, my favorite site, just in case you're starting to get a little skeptical about whether or not the bailout will actually work. Market corrections are good – not bad.
Consumers Don't Cause Recessions
Markets Need Time, Not More Poison
Financial Crisis and Recession
In Praise of Bankruptcy
Tuesday, November 18, 2008
I Told You So
In my post "Hear No Evil; See No Evil," I made a prediction that the bailout program will not work, or its results will be marginal at best. I also stated "...they will do two things: lobby for more money, and further contort their bailout package to make it look like they're doing everything they can."
It's now been just a few weeks since the TARP program was given the green light, and already there are serious problems. So far, there are complaints of politicizing the funds and who gets them; showing preferences to friends and former business acquaintances; general mismanagement of the amounts given, and how they're tracked; heavy, behind-closed-doors lobbying; and, of course, calls for more money and expansion of the program. If politicians weren't so ridiculously predictable, it might actually be fun to sound like a prophet once in a while. Instead, it's just nauseating. But I'll make another couple of predictions anyway. By the time this program is fully under way, Henry Paulson will have well over a trillion dollars at his personal disposal – a trillion dollars of your money - one thirteenth of the total U.S. GDP. (Is he the first to singularly have authority over that much money?) In addition, there will be multiple committees and subcommittees trying to govern the program, all of which will be fighting for influence over amounts, timing and distribution rights.
But I'm also a firm believer in Mr. Murphy, and his one, undeniable law.
This is rapidly becoming one of the most worrisome economic times in American history. And if there is any way that this government can prove to the world how impotent it really is, that time is now. At some point Mr. Murphy will raise his ugly, old, wart-filled, wretched head, and remind everyone that he never, ever goes away. In fact, he's already started. Can you smell it? I can. The stench of failure. It's almost time to get out the pitchforks.
In this article, one of my favorite authors, Robert Higgs, skewers the TARP, and gets in some great digs on several other policies, industries and hysteriopots. It's really worth the time to read this article, and get a less than Chicken Little review of what the TARP is, does, has done, and what should be done. He calls it “The TARP Is Dead, Long Live The TARP.” Owch.
http://mises.org/story/3217
Mark Thornton advocates a “Slash and Burn” policy to bring the economy back to a healthy norm.
Daniel Mitchell details why bailing out the auto industry is a bad idea.
Daniel Ikensen explains why “There's Nothing Wrong With a 'Big Two.'"
And in "How Did We Get Into This Financial Mess?", Lawrence White explains where the mess really originated.
http://biz.yahoo.com/cnbc/081118/27781824.html
http://biz.yahoo.com/ap/081118/congress_autos.html
http://biz.yahoo.com/ap/081118/financial_meltdown.html
It's now been just a few weeks since the TARP program was given the green light, and already there are serious problems. So far, there are complaints of politicizing the funds and who gets them; showing preferences to friends and former business acquaintances; general mismanagement of the amounts given, and how they're tracked; heavy, behind-closed-doors lobbying; and, of course, calls for more money and expansion of the program. If politicians weren't so ridiculously predictable, it might actually be fun to sound like a prophet once in a while. Instead, it's just nauseating. But I'll make another couple of predictions anyway. By the time this program is fully under way, Henry Paulson will have well over a trillion dollars at his personal disposal – a trillion dollars of your money - one thirteenth of the total U.S. GDP. (Is he the first to singularly have authority over that much money?) In addition, there will be multiple committees and subcommittees trying to govern the program, all of which will be fighting for influence over amounts, timing and distribution rights.
But I'm also a firm believer in Mr. Murphy, and his one, undeniable law.
This is rapidly becoming one of the most worrisome economic times in American history. And if there is any way that this government can prove to the world how impotent it really is, that time is now. At some point Mr. Murphy will raise his ugly, old, wart-filled, wretched head, and remind everyone that he never, ever goes away. In fact, he's already started. Can you smell it? I can. The stench of failure. It's almost time to get out the pitchforks.
In this article, one of my favorite authors, Robert Higgs, skewers the TARP, and gets in some great digs on several other policies, industries and hysteriopots. It's really worth the time to read this article, and get a less than Chicken Little review of what the TARP is, does, has done, and what should be done. He calls it “The TARP Is Dead, Long Live The TARP.” Owch.
http://mises.org/story/3217
Mark Thornton advocates a “Slash and Burn” policy to bring the economy back to a healthy norm.
Daniel Mitchell details why bailing out the auto industry is a bad idea.
Daniel Ikensen explains why “There's Nothing Wrong With a 'Big Two.'"
And in "How Did We Get Into This Financial Mess?", Lawrence White explains where the mess really originated.
http://biz.yahoo.com/cnbc/081118/27781824.html
http://biz.yahoo.com/ap/081118/congress_autos.html
http://biz.yahoo.com/ap/081118/financial_meltdown.html
Sunday, November 16, 2008
The Good Die Young
My condolences to the families and friends of everyone lost in the Mexican Interior Ministry airplane crash on November 4th, in Mexico City. Mexican citizens have been shaken very hard by the event. It's made news daily since it happened. There were a total of 13 people lost – 8 on the plane, and 5 bystanders on the ground. The plane crashed in a prominent and famous locale during rush hour traffic. The site just happens to be in line with one of the landing lanes at Mexico City International Airport. The crash has so far been attributed to possible pilot error during a necessary correction due to jet wash from another plane. Several interior ministry employees were on the plane at the time. There were no survivors. In the United States, a similar event would be like losing nearly the entire U.S. Cabinet in a single crash. What has saddened Mexicans most is the loss of Secretary of the Interior, Juan Camilo Mourino, who, since Calderon took office, had been very successful in fighting internal corruption and drug cartels. He was a personal friend of Felipe Calderon, and publicly very popular.
http://news.xinhuanet.com/english/2008-11/08/content_10326077.htm
http://en.wikipedia.org/wiki/2008_Mexico_City_plane_crash
http://www.bloomberg.com/apps/news?pid=20601086&sid=al.fglwKaupA
http://news.xinhuanet.com/english/2008-11/08/content_10326077.htm
http://en.wikipedia.org/wiki/2008_Mexico_City_plane_crash
http://www.bloomberg.com/apps/news?pid=20601086&sid=al.fglwKaupA
Saturday, November 15, 2008
Dog Flourishes On Two Legs
Meet Faith, one of the world's most impressive dogs. It's rated G, and takes about two minutes. “The greatness of a nation and its moral progress can be judged by the way its animals are treated." - Mahatma Gandhi
Super Powers
Here is a funny youtube video of a couple trying to spice up their sex life. It's PG-13, and takes about 6 minutes.
Wednesday, November 12, 2008
Hear No Evil; See No Evil
Here's proof government causes major distortions in the marketplace, and they don't listen to the responses.
A story published on Yahoo News November 12th, entitled “Stocks lower as Paulson unveils change in bailout,” states:
"...the government's $700 billion financial rescue package won't
purchase troubled assets from banks as originally planned.
Paulson also announced a new goal for the program to support
financial markets which supply consumer credit in such areas
as credit card debt, auto loans and student loans. He said,
'with a stronger capital base, our banks will be more confident'
to support economic activity."
Later in the same article, is the news of widespread reaction.
“Morgan Stanley outlined plans to cut 10 percent of staff... The layoffs are in addition to a 10 percent cut made earlier this year.”
“Morgan Stanley also plans to restructure its money management business by cutting 9 percent of the group's workforce.”
“In midday trading, the DOW shed 278.21, or 3.2 percent...”
“...Standard & Poor's 500 index dropped 29.34 points, or 3.26 percent...”
“the NASDAQ composite index stumbled 47.86 points, or 3.03 percent...”
“The Russell index of smaller companies fell 17.00, or 3.52 percent...”
“Declining issues outnumbered advancers by about 9 to 1 on the New York Stock Exchange.”
An article published mere hours later says it all: "Stocks skid on news gov't won't buy banks' assets."
So my question is: exactly what part of “more confident” was Mr. Paulson talking about? The banks? Obviously not. The markets? Nope. Consumer spending? No. That's down also. So they must have their fingers in their ears, and hands over their eyes, because the signals that stampede by the rest of us are incredibly obvious, but seem to pass by Washington without so much as a pitter-patter sound. And they're paying no attention whatever to the trillions of dollars in private investments in the stock markets, which make up college monies, retirement savings, vacations, etc., all drying up and blowing away every time they make one of these announcements. And to make matters worse, they're going to expand the program. No surprise there. In this one Yahoo News article, we have perfect examples of the three things gov't does best: lie, grow, and waste money. I said it elsewhere on this page; bureaucrats need to be beaten over their heads with reality. Let us not forget that this all happened in less than 24 hours. So thanks, Mr. Paulson, for all of your "help." With friends like you, who needs enemies?
I would like to make a prediction. This bailout program will not work. If there is any response at all, it will be marginal at best. When this failure becomes apparent to the power players in Washington, they will do two things: lobby for more money, and further contort their bailout package to make it look like they're doing everything they can. They'll then tell the people, “This time it will work.”
http://biz.yahoo.com/ap/081112/wall_street.html
http://news.yahoo.com/s/ap/20081112/ap_on_bi_ge/financial_meltdown
http://biz.yahoo.com/ap/081112/wall_street.html
A story published on Yahoo News November 12th, entitled “Stocks lower as Paulson unveils change in bailout,” states:
"...the government's $700 billion financial rescue package won't
purchase troubled assets from banks as originally planned.
Paulson also announced a new goal for the program to support
financial markets which supply consumer credit in such areas
as credit card debt, auto loans and student loans. He said,
'with a stronger capital base, our banks will be more confident'
to support economic activity."
Later in the same article, is the news of widespread reaction.
“Morgan Stanley outlined plans to cut 10 percent of staff... The layoffs are in addition to a 10 percent cut made earlier this year.”
“Morgan Stanley also plans to restructure its money management business by cutting 9 percent of the group's workforce.”
“In midday trading, the DOW shed 278.21, or 3.2 percent...”
“...Standard & Poor's 500 index dropped 29.34 points, or 3.26 percent...”
“the NASDAQ composite index stumbled 47.86 points, or 3.03 percent...”
“The Russell index of smaller companies fell 17.00, or 3.52 percent...”
“Declining issues outnumbered advancers by about 9 to 1 on the New York Stock Exchange.”
An article published mere hours later says it all: "Stocks skid on news gov't won't buy banks' assets."
So my question is: exactly what part of “more confident” was Mr. Paulson talking about? The banks? Obviously not. The markets? Nope. Consumer spending? No. That's down also. So they must have their fingers in their ears, and hands over their eyes, because the signals that stampede by the rest of us are incredibly obvious, but seem to pass by Washington without so much as a pitter-patter sound. And they're paying no attention whatever to the trillions of dollars in private investments in the stock markets, which make up college monies, retirement savings, vacations, etc., all drying up and blowing away every time they make one of these announcements. And to make matters worse, they're going to expand the program. No surprise there. In this one Yahoo News article, we have perfect examples of the three things gov't does best: lie, grow, and waste money. I said it elsewhere on this page; bureaucrats need to be beaten over their heads with reality. Let us not forget that this all happened in less than 24 hours. So thanks, Mr. Paulson, for all of your "help." With friends like you, who needs enemies?
I would like to make a prediction. This bailout program will not work. If there is any response at all, it will be marginal at best. When this failure becomes apparent to the power players in Washington, they will do two things: lobby for more money, and further contort their bailout package to make it look like they're doing everything they can. They'll then tell the people, “This time it will work.”
http://biz.yahoo.com/ap/081112/wall_street.html
http://news.yahoo.com/s/ap/20081112/ap_on_bi_ge/financial_meltdown
http://biz.yahoo.com/ap/081112/wall_street.html
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